Volatility And The S&P 500

We can examine volatility via the CBOE Volatility Index (VIX) and determine how to trade the S&P 500 (SPY) based on where both indices are at in present time. For instance, last Friday (as you can see in the chart below), the VIX was overbought and the S&P 500 was oversold. When that happens, we'll be looking for an entry point to buy the S&P 500. Today, we see the complete opposite happening; the S&P 500 is up and the VIX is down, so we may be looking at a pullback in S&P soon.

VIDEO: Don’t Call The Top

Hedgeye CEO Keith McCullough appeared on CNBC’s Fast Money Halftime Report today to discuss the market swooning over last week’s dismal jobs data. Keith bought the S&P 500 after the data on a pullback and discusses how buying dips on the S&P 500 and sticking with a process is the way to go. People who try to call the top of the market will ultimately be proved wrong and need to realize there’s a bull market in the US dollar and US stocks and a bear market in commodities.

HOUSING: Strong Mortgage Volume

For the first half of 2013, expectations for mortgage volumes were on the low end of the spectrum. Today's Mortgage Bankers Association (MBA) numbers downplay the underlying strength of the housing market. Although total mortgage volume for the first quarter of 2013 dropped 6% quarter-over-quarter, it remains up 6.8% on a year-over-year basis. The same goes for purchase and refinancing volumes, which are up 14.4% and 8% year-over-year, respectively.

Despite a slight increase in rates (up 0.1%) for Federal Housing Authority loans on April 1st, overall demand remains strong. Housing data continues to show improvement and low mortgage rates should help motivate buyers from both an affordability and action standpoint.

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Brian McGough On JCP

Hedgeye Retail Sector Head Brian McGough appeared on CNBC yesterday to discuss the ousting of embattled JCPenney (JCP) CEO Ron Johnson. McGough was one of the first people on Wall Street to note that the timing of the firing was a bad choice for JCPenney as it had yet to fully execute on Johnson’s plan of “stores within a store.” The company is also low on capital and the decision to bring former CEO Mike Ullman back into the mix was confusing at best noted McGough. You can watch Brian’s full appearance on CNBC in the clip posted above. Fast forward to the first minute of the video for his take on JCP.

McGough was also quoted extensively throughout various news outlets yesterday; we’ve rounded up the various stories for you to check out:

MACAU: THE RISE OF VIP HOLD

We’ve documented mass hold climbing higher over the years. VIP hold has also been trending higher lately above the theoretical win rate of 2.85% and closer to 2.96%.

March junket hold on a trailing twelve-month basis (TTM) was 3.21%, about 20bps higher than the TTM hold in January 2010. If we take into account direct play, adjusted VIP hold on a TTM was 3.00% in March, compared with a 2.80% adjusted VIP hold TTM in January 2010.

While mass volumes have been resilient so far in the face of higher hold, it remains to be seen how the high hold will affect VIP volume growth. The good news is that comps are relatively easy for the back half of the year.

If you'll recall, Hold (or Hold Percentage) is the measure of the amount of money a casino table game keeps from the total amount of money that is dropped into the table game's cash box.

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